price discrimination

Examples of price discrimination in the following topics:

• Analysis of Price Discrimination

  • In commerce there are three types of price discrimination that exist.
  • Price discrimination is a driving force in commerce.
  • By using price discrimination, the seller makes more revenue, even off of the price sensitive consumers.
  • Premium pricing: uses price discrimination to price products higher than the marginal cost of production.
  • Gender based prices: uses price discrimination based on gender.

• Examples of Price Discrimination

  • Price discrimination occurs when identical goods or services are sold at different prices from the same provider.
  • There are three types of price discrimination:
  • Methods of price discrimination include:
  • For example, a Ladies Night at a bar is a form of price discrimination.
  • These graphs show multiple market price discrimination.

• Price Discrimination

  • Price discrimination is the sale of identical goods or services at different prices from the same provider.
  • Price discrimination also occurs when the same price is charged for goods with different supply costs.
  • Although price discrimination is the producer's or seller's legal attempt to charge varying prices for the same product based on consumer demand, price discrimination can be illegal in some cases.
  • Price discrimination in intellectual property is also enforced by law and by technology.
  • Construct the concept of price discrimination relative to legal concerns in pricing

• Elasticity Conditions for Price Discrimination

  • In pure price discrimination, the seller will charge the buyer the absolute maximum price that he is willing to pay.
  • An example of price discrimination would be the cost of movie tickets.
  • Industries use price discrimination as a way to increase revenue.
  • The pharmaceutical industry experiences international price discrimination.
  • Academic textbooks are another industry known for price discrimination.

• Demand-Based Pricing

  • These include: price skimming, price discrimination, psychological pricing, bundle pricing, penetration pricing, and value-based pricing.
  • Price discrimination exists when sales of identical goods or services are transacted at different prices from the same provider.
  • Price discrimination also occurs when the same price is charged to customers that have different supply costs.
  • Price discrimination requires market segmentation and some means to discourage discount customers from becoming resellers and, by extension, competitors.
  • By definition, long term prices based on value-based pricing are always higher or equal to the prices derived from cost-based pricing.

• Differential

  • Differential pricing exists when sales of identical goods or services are transacted at different prices from the same provider.
  • Price differentiation, or price discrimination, exists when sales of identical goods or services are transacted at different prices from the same provider.
  • This usually entails using one or more means of preventing any resale: keeping the different price groups separate, making price comparisons difficult, or restricting pricing information.
  • Some economists have argued that this is a form of price discrimination exercised by providing a means for consumers to reveal their willingness to pay.
  • For example, airlines routinely engage in price differentiation by charging high prices for customers with relatively inelastic demand (business travelers) and discount prices for tourists who have relatively elastic demand .

• Demand-Based Pricing

  • Yield management can result in price discrimination.
  • These include: price skimming, price discrimination and yield management, price points, psychological pricing, bundle pricing, penetration pricing, price lining, value-based pricing, geo and premium pricing.
  • It is a temporal version of price discrimination/yield management.
  • Price discrimination or price differentiation exists when sales of identical goods or services are transacted at different prices from the same provider.
  • This process can result in price discrimination, where a firm charges customers consuming otherwise identical goods or services a different price for doing so.

• Defining Monopoly

  • Price maker: the monopoly decides the price of the good or product being sold.
  • The price is set by determining the quantity in order to demand the price desired by the firm (maximizes revenue).
  • Price discrimination: in a monopoly the firm can change the price and quantity of the good or service.
  • If the price is high, the firm will sell a reduced quantity in an elastic market.
  • The graph shows a monopoly and the price (P) and change in price (P reg) as well as the output (Q) and output change (Q reg).

• Yield Management Systems

  • Yield management systems give managers optimal control of inventory to sell it to the right customer at the right time for the right price.
  • This process can result in price discrimination, where a firm charges customers consuming otherwise identical goods or services a different price for doing so.
  • The models attempt to forecast the total demand for all products or services they provide, by market segment and price point.
  • Optimization can help the firm adjust prices and allocate capacity among market segments to maximize expected revenues.
  • Firms faced with a lack of pricing power sometimes turn to yield management as a last resort.

• Discrimination Against Individuals

  • Controversial attempts have been made to redress negative effects of discrimination.
  • Unfair discrimination usually follows the gender stereotypes held by a society.
  • Reverse discrimination is a term referring to discrimination against members of a dominant or majority group, including the city or state, or in favor of members of a minority or historically disadvantaged group.
  • Reverse discrimination may also be used to highlight the discrimination inherent in affirmative action programs.
  • Give an example of discrimination and reverse discrimination using examples of religious, gender, or racial prejudice